1 / 18

Why Are Two Heads Better Than One?

Why Are Two Heads Better Than One?. David J. Cooper Florida State University John H. Kagel Ohio State University Eric Mayefsky Stanford University. Background/Prior Research.

candy
Download Presentation

Why Are Two Heads Better Than One?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Why Are Two Heads Better Than One? David J. Cooper Florida State University John H. Kagel Ohio State University Eric Mayefsky Stanford University

  2. Background/Prior Research • Cooper and Kagel (2005) report that two-pwerson teams outperform individuals in terms of developing substantially higher levels of strategic play than individuals in a signaling game (a stylized version of Milgrom and Roberts, 1982, entry limit pricing game). • Not only the teams have higher levels of strategic play, but they beat a demanding Truth Wins (TW) norm that a team containing N individuals does better than N individuals operating independently. • Performance of teams relative to TW is particularly strong when Ss are asked to take what have learned in one game and apply it in a second, related game. • Psychology research on team play in eureka type intellective problems provides ample evidence that teams typically fail to beat the TW norm (Kerr and Tindale, 2004). Nevertheless ours do. • KT note that in cases where the team play beats the TW norm, such claims should be examined carefully. The present research is aimed at better understanding why teams do so well in CK (2005).

  3. Why Might Teams Do Better than Individuals in Limit-Price Game • Being member of a team affects individuals’ ability to reason about the game without the need for bilateral interactions. • Individuals’ abilities to reason may be stimulated by having to explain how the game is played, consistent with the extensive psychology literature on accountability (Lerner and Tetlock, 1999). • Being accountable to others can, in certain circumstances, promote self-critical and effortful thinking. • Having to interpret a teammate’s discussion may stimulate individual’s own cognitive processes. • Bilateral communication inherent in operating as a true team may help generate insights that would not have occurred otherwise. • Teamwork may play a direct role in generating the strong performance of teams so that bilateral interactions are necessary for teams to beat the truth wins criterion.

  4. Two new experiments designed to differentiate these hypotheses. • Experiment 1 replaces freely interacting two-person teams with pairings of an adviser and advisee who choose actions separately Bilateral communication is replaced by one way communication from an adviser to their advisee. • Advisees have the benefit of “two heads,” their own and their advisors, but no scope for interactive discussions. If bilateral communication is critical to strong performance of teams, advisees will not perform as well as teams in learning to play strategically. This holds even more so for advisers who do not have “another head” to work with. • Experiment 2 looks at the effect of previous experience in fully interactive teams on cross-game learning when playing as individuals. • Our teams research suggests that team play promotes the development of strategic reasoning. Experiment 2 addresses the questions of whether team play is necessary to trigger this strategic empathy in a related game.

  5. Design of Experiment 1 – Two Treatments • Games with low cost Es throughout – only pure strategy equilibrium is separating. Play converges to the efficient separating equilibrium with low cost Ms limit pricing. • Cross-Over Games • Inexperienced Ss play games with only high cost Es present which permits pure strategy pooling equilibria with high cost Ms limit pricing (which play reliably converges to). • Experienced sessions replace high Es with low cost Es, which destroys the pooling equilibrium. • In a deep sense strategic play following the cross-over is the same as before – making Es believe you are the type of M who will be a tough competitor. However, the actions needed to carry this out are quite different. With pooling high cost Ms imitating low cost types. With separating low cost Ms need to distinguish themselves from high cost Ms.

  6. The Limit Pricing Game (Milgrom and Roberts (1982)

  7. Advice Treatments and Procedures • Chat is one way • Pairings fixed within a session but not between inexperienced and experienced sessions. • Yoked advisers-advisees – so same M types (but face different Es). • Public information issues – two sets of sessions. • Advisers get extra payment equal to 30% of advisees earnings. • Not taken out of advisees earnings. • Inexperienced subject sessions • 24 games, two 12 game cycles. • Experienced subject sessions • 32 games, four 8 game cycles. • Random Matching (Strangers) • Role Switching • Generic Context • Ss paid for all rounds. • 1 franc = $.0025 + $20 show up fee. (Use of “double headers”) • Average sessions earnings $23 ($30) inexper (exper) sessions.

  8. Low Cost Entrant Games, Experienced Subjects

  9. Strategic Play by MLs, Low Cost Entrant Games

  10. Strategic Play by MLs, Crossover Sessions

  11. Possible Role of Accountability Effects in Strong Play of Advisers • Accountability: “Self-critical and effortful thinking is most likely to be activated when decision makers learn prior to forming any opinions that they will be accountable to an audience (a) whose views are unknown, (b) who is interested in accuracy, (c) who is interested in processes rather than specific outcomes, (d) who is reasonably well informed, and (e) who has a legitimate reason for inquiring into the reasons behind participants' judgments.” (Lerner and Tetlock, 1999)

  12. Content analysis of Advice • Chat levels are much lower (and less informative) with advice than with teams (3.4 vs 18 relevant messages in 24 rounds as inexperienced Ss). • Do explanations matter? Suggests that primary effect of advice is to make Ss consider strategic play. Game theoretic models virtually always assume that all available strategies are considered at all times. In reality Ss may simplify the game by not considering some strategies, locking on to one or two alternatives. Advice to play strategically can then get advisees to consider strategies that they have ignored.

  13. Further Analysis – Maybe One Can Do Better Than With Teams • Absent process loss in teams π (2x2) = 1 – (1-p(adviser))2 > p(adviser) where π (2x2) is observed prob of strategic play by MLs in teams and p (adviser) is prob of strategic play by advisers as MLs. • That is, advisers not predicted to play as strategically as teams as they do not have a “second head” to work with. We check for this. • Absent process loss in teams π(advisee) = 1- (1-p(adviser))*(1-p(1x1)) > p(1x1) where p(1x1) is the prob of strategic play in the 1x1 sessions. That is, advisees are predicted to play at the level of a simulated team made up of one advisee and one 1x1 player where TW. We check for this.

  14. Simulated teams of advisers meet or beat real teams games with low cost Es throughout and beat real teams in all crossover cycles. • Simulated teams of advisers and 1x1 players tend to meet or beat levels of strategic play of advisees which, absent team process loss, should not happen. Why? • Advisers do not always provide advice even when they play strategically – provide it only 68% (76%) of time as inexperienced (experienced) Ss. Reducing p(adviser) by these amounts alone accounts for the drop-off. This cannot be free riding or due to excess chatter, just a reluctance (or lack of confidence) to express thoughts. • Advisees only play strategically, after being given advice to do so, 63% (91%) of time for inexperienced (experienced) Ss. So truth does not always win! • But advisees are clearly doing quite well, on their own, as in the first cycle following the crossover, around half of the advisees got not advice, but still played strategically 60% of the time, which is a bit higher than teams in the same time frame. • This suggests that there might be a better way to organize than in teams. Similar to Armstrong’s (2006) results for face-to-face communication in judgmental tasks.

  15. Experiment 2 • Uses cross-over treatment only. • Ss first play in teams in games with high cost Es that converge to strong pooling equilibrium. • They then return to play as individuals – one cycle as high cost Es, after which introduce low cost Es where the only pure strategy equilibrium involves separating.

  16. Conclusions • Bilateral communication is not necessary to generate high levels of strategic play in teams. Individuals are better in teams rather than teams being better than individuals. • Strategic play in advisor/advisee sessions is virtually the same as in team sessions. Possible role for accountability effects. • Alternative explanation that needs to be checked out – “self-advice.” • Results suggest there might be better organizational structures than teams – as unaccounted for process losses. • The strategic sophistication that team play develops carries over to individual subject play. • To the extent team play is designed to identify, through analyzing chat records, the underlying behavioral processes at work in strategic interactions, teams are a far better medium for doing so compared to advice.

More Related